Average Turnaround Time On A Rehab
How long does it take--on average--to sell a property after it has been rehabbed.
What is the usual turnaround time?
Troy T (Vacaville CA)
How long does it take--on average--to sell a property after it has been rehabbed.
What is the usual turnaround time?
Troy T (Vacaville CA)
Many people (including myself) calculate in 6 months to be safe. Actual work time varies and then plan on 2-3 months to market and close.
6 months is reasonable, but it is a bit dependant on the property and the time of year. It's going to take longer in the winter and/or if it's in a less desirable area.
[addsig]
How long it takes to sell depends on many factors - most of which is the price. I see many rehabbers over improving the property and then expecting to get above Fair Market Value because their house is the prettiest in the neighborhood. Sometime they get it and sometime it just sits. It seems that the nicer the neighborhood the more likely that someone will pay extra for the prettiness. I am also a believer in listing your properties in the MLS. We have a club member who will list for a $150 flat fee. You still have to pay the buyers agent their commission. But the exposure that the MLS provides is worth the money.
Troy T ,
As stated above, The time will vary, however, an average of six months is generally the target with many investors. The three most important aspect of buying and selling (once you've decided what you want to achieve) is LOCATION, LOCATION, LOCATION.
That dictates what the market is willing to pay for a piece of property. The prettiest house in the world may not attract the money it's worth because the tenants that can afford the property don't like the location.
I do three months and if it goes beyond that, I consider it a rental/lease option. In my experience, the way to move a house is to sell on terms. The two biggest things buyers are looking for is how much down and how much per month.
If you offer them attractive terms (no money down, no closing, bruised credit OK) you will get more potential buyers.
Also, advertise BEFORE you even start rehabbing. Or, buy the house and don't do anything to it until you have a buyer (my other strategy). If you involve the buyer in the rehab process, let them choose the carpet, paint, and borders, you won't be able to pry it from their hands. Ready made homes are nice, but if the buyer can remodel it to their liking, those are other attractive terms.
Hope this helps.
What wonderful advice. Everybody said everything I wanted to say. I am indeed among my peers.
Of course I cheat. The minute I start to work on a house I post a funny sign and it is a little oversize.
"This House is being completly brought up to date. The little sign to my left is how it will look on completion. If you want to buy come see us and bring your pencil but hurry. Pink is not our favorite color. Etc Etc"
Of course in some areas the sign is also in Spanish. I write it with a lot of missspelled words and wrong tenses. I love it when they stand there and correct me. Means they really love the house.
We do a lot of support financing. I will cosign a second that has to be sold right after closing. Might as well if there is a subsequent delinquency I want a chance at it. After all we fixed it up and we know it is done right. We also are usualy named as Trustee on any Deed of Trust so we can once again control a future foreclosure.
Ah the smell of a burning drill bit in the early morning. Lucius
Lufos, what does this mean, please?
"I will cosign a second that has to be sold right after closing".
Is that a second mortgage? Why sell it?
Thanks!
QUESTION for all ...when "you" rehab, to what extent to you go? I use the surrounding neighborhood as a guide....so I understand what bgrossnickle said ..DO you concentrate on bathroom/kitchen ? Add a room? ADD A BATHroom? When is too "little" not enough? (ok..ok..I can hear it now ..daa, when the house doesn't sell) Thanks for any imput .."to imput into my next house" mcldavid
[addsig]
esuccess, you mention in your post location, location, location - is there a way to tell how fast homes in a market are moving or other hot/cold market identifiers?
P.S. - This is my first post to the rehabber forum. my father used to say he thought surgeons were the coolest doctors because they could work with their brains and their hands. I think reahbbers are the surgeons of REI!
If I plan on buying a property and flipping. I usually have them sold within 4 months. I create a schedule for the work to be started the day after closing and try to keep everything going smoothly from that day on. I start to market the house in the paper the very next week. By the time the house is completely finished I have the buyer in place. So far the longest I've had to hold a house for is just under 3 months from the time I bought it until the time I sold it. But in order to do this you must have all your ducks in a row. GOOD LUCK
A good way to get an idea of how long the building will take to sell is by pulling the comps (compareables). Any realtor will pull'em for you -especially if you list a property or two with'em.
I wouldn't over improve a place. Actually, I'm the one usually pulling my financer back down to earth!
Thanks,
OnTheWater
You want to figure at least 6 month's as
mentioned above. This is a really funny question. I have had houses that were
middle of the block, excellent location
take 9 months to get closed and houses
that were in warzones take 2month's.
You will find this to be the case also at one point or another.
The main thing is marketing. If you pay one of those listing companies a small fee to list your house, you can offer 6%
to the selling agent. This has worked well for me. If you were an agent and
your buyers were looking for a house, which house would you show them, the one offerring 3% to the selling agent or the one offerring 6%? The agents I work
with know I offer 6% commission with a
full-price offer. I have houses that sell
before they are even rehabbed!
Best of luck
Jeffrey Adam
[addsig]